(a) shall be eligible to incorporate a OPC;

(b) shall be a nominee for the sole member of a OPC.

Types of OPC

Section 3(2) of the Companies Act, 2013 provides that the OPC formed under section 3(1) may be either—

(a) a company limited by shares; or

(b) a company limited by guarantee; or

(c) an unlimited company.

Name of the OPC must include the last word as Private Limited

Section 4(1) of the Companies Act, 2013 provides that the memorandum of a company shall state the name of the company with the last words “Private Limited” in the case of a private limited company, except a company registered under section 8 of the Act.

Liability of the subscriber in case of OPC

The liability of the member of the OPC may be limited or unlimited, and the Memorandum of Association of the OPC shall state,—

(i) in the case of a company limited by shares, that liability of its member is limited to the amount unpaid, if any, on the shares held by them; and

(ii) in the case of a company limited by guarantee, the amount up to which member undertakes to contribute—

(A) to the assets of the company in the event of its being wound-up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company or of such debts and liabilities as may have been contracted before he ceases to be a member, as the case may be; and

(B) to the costs, charges and expenses of winding-up and for adjustment of the rights of the contributories among themselves.

OPC needs to have minimum share capital as may be prescribed

In the case of the OPC having a share capital, the Memorandum of Association of the OPC shall state that the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount and the number of shares which the subscriber to the memorandum agree to subscribe which shall not be less than one share and the number of shares subscriber to the memorandum intends to take, indicated opposite his name. The name of the nominated person shall be given in the Memorandum of Association who, in the event of death of the subscriber, shall become the member of the company.

Restrictions on OPC

The Companies (Incorporation) Rules, 2014 put certain restrictions on the OPC as under:

(1) No minor shall become member or nominee of the OPC or can hold share with beneficial interest.

(2) OPC cannot be incorporated or converted into a company under section 8 of the Act.

(3) OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.

(4) OPC can convert voluntarily into any kind of company unless two years have expired from the date of incorporation of OPC, except threshold limit (paid up share capital) is increased beyond fifty lakh rupees and its average annual turnover during the relevant period exceeds two crore rupees.

Name of the OPC

Section 4(2) of the Act provides that the name of the OPC shall not—

(a) be identical with or resemble too nearly to the name of an existing company registered under this Act or any previous company law; or

(b) be such that its use by the company—

(i) will constitute an offence under any law for the time being in force; or

(ii) is undesirable in the opinion of the Central Government.

A company shall not be registered with a name which contains—

(a) any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central Government or any State Government under any law for the time being in force; or

(b) such word or expression, as may be prescribed, unless the previous approval of the Central Government has been obtained for the use of any such word or expression.

 Application for reservation of name of OPC

A person may make an application, in the e-Form RUN accompanied by fee of `1,000, as per the Companies (Registration Offices and Fees) Rules, 2014, to the Registrar for the reservation of a name set out in the application for the name of the proposed company or the name to which the company proposes to change its name.